Re: [OPE-L] Che Guevara and the Sraffian notion of profit

From: Ian Wright (wrighti@ACM.ORG)
Date: Mon May 07 2007 - 14:44:07 EDT

> I am not convinced here, the existence of a surplus allows economic
> growth, this sort of growth is not possible using unitary matrices,
> so in order to track the growth of capital stocks he needs non unitary
> matrices.

Sraffa doesn't "track the growth of capital stocks". His theoretical
tools are entirely inadequate for this task. He has a one-time
snapshot of the production of an undistributed surplus.

But I agree that to model *non-proportionate* economic growth one must
deal with symmetry-breaking technical change, which results in
non-unitary matrices. But this must occur in the context of a dynamic
theory, in which there are adjustment rules, expressed in terms of
differential or difference equations. In such approaches,
out-of-equilibrium the price and real cost matrices are non-unitary;
but in equilibrium they are not.

>Restoring unitarity it is not just a matter of specifying a
distribution of income
>one needs to track all material flows : depletion of natural resources,
>creation of waste - CO2, rubbish dumps etc.

Include as much of the material world as you want in the input-output
matrix. It will still remain non-unitary in Sraffa's approach because
it is not closed to final demand. The technique is "productive" hence
its dominant eigenvalue is less than 1. The loss of non-unitary
matrices in the transition from Ch. 1 to Ch. 2 in PCMC is a
straightforward mathematical fact. The confusion occurs over the
interpretation of this transition.


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